Cdt Equity Inc

This management proposal asks shareholders to authorize one or more charter amendments to permit the Board to implement reverse stock splits of the Company’s common stock at whole-number ratios between 1-for-2 and 1-for-100, with an aggregate cap of 1-for-500, and to give the Board discretion to choose the ratio(s) and to abandon any approved amendment before filing. Management frames the request as a tool to preserve Nasdaq listing compliance (minimum bid price) and to increase institutional and broker-dealer interest by producing a higher per-share stock price, which could also make the stock more attractive to funds, analysts and employee recruitment. The Board emphasizes it would not be obligated to enact any reverse split even if approved, reserving the right to implement none, one, or multiple splits as market conditions dictate; this dual-step approach gives flexibility but also transfers substantial timing and ratio discretion to management. Key risks highlighted include the possibility that a reverse split may not sustain a higher trading price, possible reductions in liquidity due to fewer shares outstanding, and the potential anti‑takeover effects from increasing the pool of unissued authorized shares. The proposal preserves authorized share counts and provides for cash-out of fractional shares at the pre-split market price; it also notes U.S. federal income tax considerations and that Delaware law requires stockholder approval of charter amendments. For an analyst evaluating this measure, the proposal is governance-light in that it centralizes implementation discretion with the Board — useful in rapid-response scenarios to avoid Nasdaq deficiency notices, but it warrants close monitoring of board decision-making and communication about when and why any split is executed. The Board’s recommendation in favor is based on preserving listing status and potentially enhancing marketability; shareholders should weigh that potential benefit versus the dilution dynamics associated with outstanding warrants and convertible securities and the historical uncertainty about the price impact of reverse splits in similarly situated small-cap firms.

This management proposal requests Nasdaq Rule 5635 shareholder approval to permit issuance of shares upon conversion of a senior secured convertible note and upon exercise of associated warrants issued to J.J. Astor & Co. because the potential issuance could exceed Nasdaq’s 19.99% threshold. The financing provided upfront cash and contains conversion terms tied to VWAP measures and Nasdaq floor-price protections; conversion prices are defined as formulas (initially the greater of 90% of the lowest 10-day VWAP or Nasdaq floor, later amended to 70% of 20-day VWAP or the Nasdaq floor under the Amended Agreements) with beneficial ownership caps (initially 4.99%, convertible to 9.99% at the lender’s option) to limit immediate control shifts. The Note includes default protections that increase principal to 120% and apply a 19% default rate, and the related warrants carry multi-year exercise windows and specified exercise prices; amendments further changed the principal and warrant counts. Management frames the request as required regulatory housekeeping to permit the agreed financing to operate while complying with Nasdaq rules, and recommends approval to preserve access to the financing. For an analyst, the proposal’s material governance and capital-structure impact centers on dilution risk (potential issuance of a substantial fraction of outstanding shares), conversion pricing mechanics tied to VWAP that could produce a significant number of shares if the stock trades at low prices, and restrictive default terms that could accelerate dilution. The Board’s recommendation to approve reflects the strategic need for committed capital and the company’s view that the transaction’s terms and controls are acceptable; however, shareholders should consider the potential short- and long-term dilutive effects, the interplay with other outstanding convertible instruments and pre-funded warrants, and the risk that favorable conversion formulas combined with low trading prices could magnify dilution.

This management proposal seeks shareholder approval under Nasdaq Listing Rule 5635 to authorize the potential issuance of up to 12,131,770 shares upon exercise of pre-funded warrants issued to certain Sarborg shareholders as part of the Company’s acquisition of a minority stake in Sarborg. The pre-funded warrants carry a nominal exercise price ($0.0001) and are currently not exercisable until stockholder approval is obtained, but because they represent more than 19.99% of the outstanding common shares at issuance, Nasdaq approval is required. Management argues the issuance is part of a strategic acquisition of Sarborg equity and that Board approval to permit exercise is necessary to complete the commercial and contractual terms of the purchase agreement. From a capital-structure perspective, the potential exercise would be highly dilutive — issuing over twelve million shares against a small outstanding base — and would materially reduce current holders’ percentage ownership and could depress per-share metrics. The transaction includes beneficial ownership limits on exercise and other contractual restrictions, but shareholders must weigh operational/strategic benefits of the Sarborg acquisition (including access to Sarborg services or IP) against the immediate dilution and potential market reaction. The Board’s recommendation to approve indicates management prioritizes completing the Sarborg transaction and having the flexibility to permit exercise; sophisticated investors should seek clarity on the strategic rationale, expected benefits from the Sarborg stake, and any contingencies or protective steps to mitigate dilution impact.

Proposal No. 6 seeks a stockholder authorization to allow the Board to adjourn or postpone the Annual Meeting if needed to continue soliciting votes to obtain approval for Proposals 1–5. While procedural in nature, the authority to adjourn is practically important for management because several material proposals (including reverse split and Nasdaq-related issuances) may require additional votes or time to secure approval, and adjourning allows management to continue outreach without reconvening a new meeting. The Company states it does not currently intend to adjourn if sufficient votes are received, but asks for the contingency power to prevent a failed meeting where critical funding and corporate-governance proposals remain unresolved. For an analyst, voting to permit adjournment is typically low-risk and aligns with shareholder interests in avoiding the cost and delay of reconvening a separate special meeting; however, repeated adjournments can delay resolution of sensitive matters and may reflect insufficient early shareholder support. The Board recommends a “FOR” vote to preserve flexibility to complete the solicitation and to protect against the operational and financial consequences of proposals failing due to insufficient votes.